Earnings Season: Gloom and Doom, or Not?

By Sam Mamudi

Intel (INTC), the world’s largest semiconductor maker, is poised to report its biggest quarterly earnings drop in 3 1/2 years this week, based on analysts’ estimates compiled by Bloomberg. General Electric (GE), the maker of jet engines and electrical generation equipment, may post its slowest profit growth in three quarters.

The results would contribute to a predicted 2.5 percent increase in fourth-quarter earnings for the Standard & Poor’s 500 Index (SPY), the second-worst showing since 2009. Without a bump from financial companies that have cut jobs, the gain would be lower at 0.4 percent.

It’s not easy to say if the seemingly new-found confidence in stocks would survive a weak earnings season, but it’s at least worth realizing that bad results won’t necessarily mean a market drop.

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